Mr. Gift explained that the revenue sharing formula of 24 percent for Nevis and 76 percent for St. Kitts would be from a pool of all VAT collected from within the jurisdiction of the Federation. Twenty-four (24) percent of the pooled amount can be more than what Nevis collects in total. There are currently 478 businesses registered in St. Kitts and 179 in Nevis.
Gift explained that the formula was based on population and Gross Domestic Product (GDP) data. The formula is not set in stone and could be revisited at any time in the future.
“All VAT proceeds from both St. Kitts and Nevis would be pooled and deposited in an account with National Bank, this account will be for the sole use of depositing VAT collected in both Islands. This account is accessible from the National Bank Branch in either island. An important check and balance of the procedure is that the Financial Secretary of St. Kitts and a Financial Secretary from Nevis must both have their signatures on any cheque drawn on the account.
“At the end of every business day, a small portion of the day’s receipts would be withheld for refunds; the balance of the day’s receipts would be transferred according to the VAT revenue sharing agreement, 76 percent to the Federal Treasury and 24 percent to the Nevis Treasury. This will ensure that both Treasuries will benefit from the collection of VAT daily,” he said.